India cbank panel submits report on pricing of credit by banks

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Last Updated: Thu, Apr 10, 2014 12:50 hrs

MUMBAI, April 10 (Reuters) - A panel set up by India's
central bank has recommended that banks' base lending rate
should be based on the marginal cost of funds if their average
deposit tenure is on the lower side.

The panel, which was headed by Reserve Bank of India (RBI)
deputy governor Anand Sinha, had been set up to bring in
transparency in credit pricing framework among Indian banks.

The panel also said interest on floating rate loans should
only be reset on specific dates irrespective of changes in the
base rate.

The RBI has called for public comments on the
recommendations by May 16.